Tax reform is still required, or we need urgent and substantial cuts to services and headcount

Ms Ozanne, who has apparently just returned to Guernsey and therefore contributed very little to Guernsey’s economy, is keen to pontificate about tax.

Contrary to Ms Ozanne’s populist ‘eat the rich’ narrative, higher earners in Guernsey already contribute proportionately more because they do not receive tax allowances. Roughly 6% of the tax-paying population (about 1,000 households) contribute 25% of all tax already. That’s one in four doctors, nurses, teachers, firemen, policemen, etc, paid for by people who generally do not seek support from the States for education, health, transport or otherwise. Every one of that 1,000 pays as much tax as 15 ‘ordinary’ taxpayers – which is equivalent to the number of employees in a medium to large-sized Guernsey business. We need more of them, not fewer – putting up tax further for high earners will certainly not enable that to happen.

The last thing Guernsey needs is to harm our already fragile and highly-competitive main industry by driving it away with more taxes, and therefore wage inflation and higher operating costs – suggesting otherwise demonstrates a serious lack of understanding of our fragile and precarious economic situation and the fickle decision-making processes within financial institutions which can enable them to relocate rapidly.

There is of course an ideal solution to making those who don’t contribute at all pay tax – it’s called the tax reform package we brought to the States (an element of which was GST), not least because high earners are also de facto high spenders.

Under the progressive tax reform proposals put forward by the last P&R, over 50% of households would have been paying less tax overall next year than they are now because the first 30k of their income would have been at 15% tax, not 20%, with bigger allowances – helping to close the gap.

Prices have gone up nearly 40% since our proposals were put to the States. GST would have been a drop in the ocean by comparison.

I speak to lots of local people too – but because I am in command of the unfortunate facts and willing to explain them, I find most accept that we need more revenue to overcome challenges in pensions and health but the real reason the public doesn’t want to accept the need for more revenue (GST or otherwise) is because they don’t trust the States not to waste that money on more things they neither want nor asked for. I don’t blame them because I don’t trust the States either and I’m a deputy.

If we don’t want taxes to rise, the government needs to make urgent and substantial cuts, both to services and headcount, or at least let’s have the greatly media-spun but now non-existent ‘fairer alternative’.

The costs-saving committee was just about to report when defenestrated, that good work has obviously gone on the ever-growing ‘too difficult’ pile.

We need to demonstrate to the public that we are willing to rein in the public sector, starting by cutting government services which the majority do not want or need. Active transport would be a good starting point, for example, together with abandoning plans to restrict car parking at Grandes Rocques.

DEPUTY Mark Helyar